FOREX-Dollar slips as focus shifts to yields, commodities

SINGAPORE, May 6 (Reuters) - The U.S. dollar was broadly weaker on Tuesday as doubts resurfaced about the health of the U.S. economy while record oil prices lifted commodity currencies such as the Australian and Canadian dollars.

The euro rose 0.3 percent against the dollar, overcoming Monday's data showing an unexpected weakening in euro zone investor morale in May and helped by ECB President Jean-Claude Trichet's warning of significant inflation risks.

Against a basket of six major currencies, the dollar was hovering at 73.03 .DXY, having backed off a 73.698 high on Friday.

At 0310 GMT, the euro bought $1.5530 <EUR=> having recouped all the losses suffered after Friday's U.S. payrolls report was not as weak as expected. Traders said support had been solid in the $1.5340/60 area and the market seemed to be in a mood to test resistance around $1.5570.

Trade was again thin with Tokyo off on holiday for a second day, keeping the dollar subdued around 104.72 yen <JPY=> after failing to sustain a 105.62 high on Monday.

"The dollar is coming under renewed pressure as global risk appetite appears to be stabilising," said Callum Henderson, head of currency strategy at Standard Chartered Bank. "Investors have a lot of cash and are starting to reinvest, refocusing on nominal interest rate spreads and going for carry."

"In this environment, the dollar, which rallied on a positional short squeeze rather than improving fundamentals, is once again under pressure due to low yields."

The dip in the U.S. dollar came despite surprising strength in the ISM survey of U.S. services, which climbed to 52.0 in April from 49.6 in March, putting it above the 50 threshold that separates growth from contraction.

Instead, the market chose to focus on a Federal Reserve loan officer survey showing a sharp tightening in credit conditions [ID:nN05377572] and reports of widespread job cuts at financial institutions.